If you’ve been asked to serve as the executor of someone’s will, you should feel honored. It shows the person has a lot of faith in your integrity, as well as in your ability and organizational skills to carry out his or her last wishes.
But just because you’ve been offered the role doesn’t mean you should automatically accept it. Agreeing to take this on is hardly the same as offering to drive your neighbor to a doctor’s appointment or watering their plants while they’re away.
Fulfilling your legal duty as an executor could take weeks, months or, yes, even years to unwind, depending on the complexity.
So, once the flattery of being asked to be an executor wears off, take some time to do a little research so you can make an informed decision as to whether you should accept this important assignment.
Here are some issues to consider:
What does an executor do?
The primary role of an executor also called a personal representative, is to settle the estate of a person who has died. The executor must pay off all debts and taxes the deceased owed and then make sure that what remains ends up in the rightful hands of those designated in the will.
It seems straightforward, right? But it can get complicated if the will is no longer current, the assets of the deceased are hard to locate, or the will is contested.
Phone calls, visits to courthouses, unearthing financial statements and sending out registered letters are just some of the unglamorous tasks that executors can expect to perform. In essence, you could be sorting through decades of someone’s financial life and acting as the estate’s legal representative.
Being an executor is a lot easier, of course, if the deceased’s affairs are in good order and you know where to locate all the documents you need, such as bank accounts, titles, insurance policies and so forth. It can take significantly longer if you must chase these things down.
Though many people perform the role of an executor, even if they are not a lawyer or have no legal background, you might find that the estate you’re dealing with is so complicated that you might want to consult with a professional.
Along those lines, before agreeing to serve as an executor, perhaps you and the person asking you to take on the role could meet with an attorney who can point out potential pitfalls or other issues that may have not been properly addressed by the will or estate. A will written several years ago, for example, may no longer reflect the current intentions of the person asking you to be the executor. An outdated will that shows conflicts could be more easily contested.
It starts with the will
A will is like a road map for executors, and knowing what it contains can aid you greatly with your work. Pore over it, page by page, with the person who wants you to take on the role. This proactive approach will help you understand the deceased’s intentions about a whole range of concerns, such as the desired distribution of financial assets or the care of their pets. Make sure you know where the will is kept and how you can access it quickly.
Ideally, the document has named the individual to serve as executor. Upon the decedent’s death, the executor must file a petition with the probate county where the decedent resided. The original will, along with a fee, must be submitted to the court with the petition. The court reviews the will to ensure its validity before granting its formal appointment.
However, if all the person’s assets are held in a trust or accounts have been jointly titled with another person, it might be possible to skip probate.
Distribute the inheritance
After debts and taxes are paid from the estate, the executor can begin the job of distributing assets to the people named as beneficiaries in the will. If the will calls for any real estate holdings to be sold, it’s the executor’s job to maintain the home and continue to make mortgage, utility and insurance payments until it’s sold off.
Many executors perform their duties without compensation, especially if they are one of the estate’s beneficiaries. But executors can get paid for their work, and this arrangement is more common if the executor is a person outside the family or if settling the estate requires significant expenses such as travel or filing court documents.
The executor’s fee is typically a small percentage of the estate’s value, around 2 to 4 percent, though the amount varies by state. If the estate is unusually large, the percentage might be less. On the other hand, if there are extraordinary circumstances, such as overseeing the sale of the decedent’s real estate, litigation costs defending the estate, tax disputes, and so forth, the executor might be paid more.
Another option is for the person writing their will to limit the fees to a specific dollar amount. Or the person may specify the payment of reasonable fees based upon state law.
Typically, executors can expect to get paid once the estate is settled. If they incur out-of-pocket expenses, such as utilities, property taxes, insurance, storage fees, etc., before the estate is settled, they can usually reimburse themselves during the course of their estate administration. But again, compensation is a subject that should be clearly spelled out before accepting an executorship. Spending down any estate monies can be an area of great sensitivity, especially if heirs believe their inheritance was reduced because of your executorship.
Watch out for family strife
The period after the death of a loved one, especially if it’s unexpected, can be emotionally charged. Seemingly innocent decisions about who gets mom’s wedding band or dad’s gold watch can devolve into scorched-earth family battles.
The potential for such a powder keg may be reason enough to graciously turn down the assignment. If you’re an executor outside the family, whatever you do — even if it’s the right thing — may be viewed with suspicions by the family or other potential heirs. On the other hand, if you’re an heir, others might suspect you of taking more than your fair share of the estate given your access to it. Keep a paper trail of all the money you spend in settling the estate in case you’re questioned.
That said, if you have a good idea of what to expect and believe you can take the incoming heat (perhaps that’s exactly why you were selected for the role), then you should not be deterred by looming family squabbles or protests.
Please note, however, that executors have a legal responsibility to act as a fiduciary. If they don’t, they could be exposed to legal liability. If they are negligent in performing their duties, such as filing tax returns or allowing insurance policies to lapse, they could be held personally liable for the financial consequences. If you’re worried about letting things fall through the cracks, consider hiring a lawyer or accountant to help keep you abreast of all the tasks that could come your way.
Should you serve as an executor?
The decision to serve as an estate’s executor is a personal one. It depends on whether you believe you have the time, skillset and temperament to perform the duties well. Ask the person who invited you to take on this awesome responsibility to restate why he or she believes you are the best person to fill this role.
Having them clearly state their motivation for your selection can serve as reassurance that you are indeed the right person for the job and also help you fend off possible challenges or complaints by those unhappy with the decision.
If you are chosen to be an executor, consider it a great honor. But at the same time, keep in mind that it is also a great responsibility.
We hope this article has given you some help with things to think about. Of course, every situation is different. This information is intended to be general and educational in nature, and should not be construed as financial or legal advice.